If you are in the Currently Not Collectible Status, it is because you have provided a collection information statement to the IRS and have proven that you do not have the ability to pay due to a financial hardship.
The fact that you are in Status 53 “Currently Not Collectible Status” (CNC) protects you from IRS levies and other enforced collections. This protection will not last forever without review and continued compliance (i.e. timely filed returns with zero balances due).
In addition to remaining current on filings and tax liabilities, what else could cause you to fall out of uncollectible status?
1. Your income increases which may be an indication that you are no longer in a financial hardship. The IRS will be monitoring your future tax returns looking for increased income. If your income increase is significant, the IRS may ask you to revise your collection information statement. Should your new collection information statement indicate that you now have the ability to pay, you will be removed from “currently not collectible” status.
2. Your case was marked with a pre-set review date. This date is typically set out 18- 24 months. If this is your case it is because the IRS agent that placed you in CNC status believed there was going to be a change in status in the future.
3. The IRS can review your collection status at any time, without a reason. The IRS is tasked with monitoring collection status and, as such, has the right to review your collectability status at any time. Denying their request for the revised collection information statement is the fast track back to collections.
During the years 2008-2013, the Treasury Inspector General reported 5.7 million accounts in “currently not collectible” status. We have seen cases that have remained in CNC for the entire 10 year collection statute. It seems after a few reviews the IRS begins to forget about you. At that point unless you do something to bring attention to yourself (i.e. increased income, unfiled returns, and future tax liabilities), these are issues that are hopefully within your control.
If your financial situation warrants the “currently not collectible” status it will prevent the IRS from taking enforced collection action. When combined with the expiration of the statute of limitations on collections, this may become a legitimate method of resolution for your IRS tax debt.
Stay in Touch with
The Rescue Squad at Legacy Tax & Resolution Services here on LinkedIn.
What Do You Need To Know If The IRS Seized Your Bank Account?
3 Critical Things to Know Before Trying To Deal With the IRS On Your Own